ISLAMABAD: The Federal Board of Revenue (FBR) will brief Prime Minister Shehbaz Sharif on the revenue target/collection, broadening the tax base, reform initiatives, enforcement measures, use of Information Technology to document financial transactions and automation to bring transparency in the tax system.
It is reliably learnt that the FBR has received instructions from the PM Secretariat for briefing to the prime minister.
Sources told that the tax authorities including relevant FBR Members remained engaged in preparation of the presentation to the prime minister and new government’s economic team including ex-finance finance Miftah Ismail.
The FBR Member Inland Revenue Policy and FBR Member Customs Policy were busy in the finalisation of the presentation for the new government.
The FBR will inform the new government about the strategy to achieve the revised target of Rs6.1 trillion for 2021-22, policy and enforcement measures, litigation in courts, registration of the retail sector, point of sales (PSO) system, award scheme and progress on the track and trace system.
The FBR will also focus on: (i) introducing a centralised, risk-based compliance function; (ii) modernising the IT system and further advancing automation; (iii) actively using third-party data, strengthening data cross-checking, and analysis; (iv) simplifying registration and filing processes; (v) modernising audit practices and taking a more targeted audit approach; and (vi) further strengthening the large taxpayer approach and expanding the activities of the Large Taxpayer Office (LTO).
Additionally, the FBR will continue the process of sales tax harmonisation between federation and provinces.
The FBR has provisionally collected net revenue of Rs4,382 billion during July-March (2021-22) against the assigned target of Rs4,134 billion, showing an increase of Rs248 billion. There is an achievement of 105 percent of the assigned target during the period of July-March (2021-22).
The FBR has collected net revenue of Rs4,382 billion during July 2021 to March 2022 of the current financial year 2021-22, which has exceeded the target of Rs248 billion. This represents a growth of about 29.1 percent over the collection of Rs3,394 billion during the same period, last year.
The refunds worth Rs229 billion have been disbursed during July 2021 to March 2022 compared to Rs183 billion paid last year, showing an increase of 25.0 percent.
The FBR will further inform that the sales tax on all POL products has been reduced to zero which cost the FBR Rs45 billion in March 2022. The revenue impact of sales tax exemptions provided to fertilizers, pesticides, tractors, vehicles, and oil and ghee come to Rs18 billion per month.
The zero-rating on pharmaceutical products has cost FBR Rs10 billion in sales tax during March 2022. Thus, in aggregate these relief measures have impacted revenue collection by approximately Rs73 billion during March 2022. Furthermore, the political uncertainty and import compression also negatively impacted revenue collection during March.
